TMI Blog2016 (10) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... om M/s. Maxpro Associates is accounted on the basis of credit notes issued. Since, M/s. Maxpro Associates could not finalize its books of account in time, M/s. Maxpro Associates issued credit notes to the assessee for the last quarter of the financial year ended on 31-03-2008 in December, 2008. The assessee finalized its books after receiving credit notes from M/s. Maxpro Associates. However, the assessee filed the tax audit report as envisaged u/s. 44AB of the Act along with the return of income within the extended time for filing of return of income u/s. 139(4) of the Act. The explanation furnished by the assessee for delay in finalization of accounts and getting the same audited thereafter seems to be plausible. The delay in finalization of accounts was beyond the control of assessee. In the absence of finalization of accounts it was not possible for the assessee to get the same audited within the time specified under the provisions of the Act. Mere delay in filing of tax audit report as envisaged u/s. 44AB would ipso facto not attract the penalty where the delay in filing of audit report has been reasonably explained. The Co-ordinate Bench of the Tribunal in the case of Prac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71B of the Act. 3. The ld. AR of the assessee filed written submissions which are as under : 1. FACTS OF THE CASE: The appellant is a firm has submitted its return of income declaring total income of ₹ 29,51,840/- on 30/03/2009. During the course of assessment proceedings the appellant firm has revised its computation of income in view of disallowances under section 40(a)(ia) of the Act and declared income of ₹ 30,25,544/-. The same has been accepted by the learned assessing officer and made assessment u/s. 143(3) by assessing the income at ₹ 30,25,540/-. The assessing officer has levied the penalty of ₹ 1,00,000/- u/s 271B of the Act on account of getting books of accounts audited u/s. 44AB of the Act on 20TH JANUARY, 2009 whereas the same should have been done before the specified date i.e. 30th September, 2008. The delay was of 3 months and 20 days only. The learned Commissioner of Income Tax (A), Thane has erred in not considering the submission and explanation furnished before him and confirmed the penalty levied u/s. 271B of the Act. The appellant has reasonable cause which prevented him for not getting books of accounts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er making necessary verification and handed over tax audit report to the appellant firm on 20/01/2009. In view of above reasonable causes the penalty u/s. 271 B should have not been levied. b. Your honour it has been held in various decisions that mere failure to file Audit report in time will not justify levy of penalty as power u/s. 271 B is discretionary (Hon'ble Madras High Court in the case of Thanjavur Silk Union of India reported in 263 ITR 334). Similar view has been taken by the Hon'ble Calcutta High Court the case of CIT Vs. Capital Electronics (Gariahat) reported in 261 ITR 4. Since in the instant case, there is no absolute default and the assessee has filed Audit report although belatedly, we are of the considered opinion that there was bonafide reasons for not getting the accounts audited before the statutory due date and therefore this is not a fit case for levy of penalty u/s. 271 B of the I.T. Act. We have also relied upon the decision of Hon'ble Income Tax Appellate Tribunal Pune, Bench A in the matter of: Prachin Land Infra Pvt. Ltd. Vs. I TO, Ward -2, Panvel (ITA No. 917/PN/2013 of Asstt. Year: 2007-08). c. Your honour, obtaining T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy of penalty u/s. 271B of the Act. The ld. DR contended that the assessee has violated the provisions of section 44AB of the Act by not filing the audit report within the specified time. The explanation furnished by the assessee for delay in finalization of the accounts and the audit of the accounts has been rightly rejected by the authorities below as the same were not supported by any cogent evidence. 5. We have heard the submissions made by the ld. DR and have perused the written submissions furnished on behalf of the assessee and the orders of the authorities below. As per the provisions of section 44AB of the Act the, the assessee was required to get accounts audited for the assessment year under appeal on or before 30-09-2008. However, the assessee could get the accounts audited on 20-01-2009. Thus, there was delay of 3 months and 20 days in getting the accounts audited and obtaining tax audit report u/s. 44AB of the Act. A perusal of the written submissions filed by assessee and impugned order shows that the delay in getting the accounts audited was for the reason that the Accountant of the assessee left his service without finalization of the accounts. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessee has filed Audit report although belatedly, we are of the considered opinion that there was bonafide reasons for not getting the accounts audited before the statutory due date and therefore this is not a fit case for levy of penalty u/s.271B of the I.T. Act. In this view of the matter, we set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty levied u/s.271B of the I.T. Act. 7. Similarly, in the case of Hemant Ramchandra Dake Vs. ITO (supra) the Tribunal deleted the penalty levied u/s. 271B of the Act where the audit report was furnished belatedly after obtaining the same on 16-01-2009 as against the statutory date of 31-10-2007. In the said case the finalization of accounts were delayed as the Accountant had left the service. The facts of the case are quite similar to the facts of the case in hand. 8. The Hon'ble Madras High Court in the case of Commissioner of Income Tax Vs. Apex Laboratories Ltd. reported as 384 ITR 364 deleted the levy of penalty u/s. 271B where the assessee filed Audit Report along with the return of income filed belatedly. Thus, in view of the facts and circumstances of the case and the variou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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